March 27 (Reuters) - Australia's Domain Holdings

said on Thursday that U.S. online real estate firm

CoStar ( CSGP ) has sweetened its proposal to buy the property

classifieds firm, now valuing it at A$2.80 billion ($1.76

billion).

CoStar ( CSGP ) has revised its offer to A$4.43 per share, Domain

said in a statement, representing a 5.5% premium to its original

proposal of A$4.20 per share.

The improved price also represents a premium of 1.4% to

Domain's share price at close on February 21, the day CoStar ( CSGP )

made its first proposal, aiming at its first potential foray

into Australia.

Domain also said it may be able to declare a pre-completion

special dividend under the improved proposal, and the firm's

board has decided to unanimously engage with CoStar ( CSGP ) and

facilitate appropriate due diligence access.

($1 = 1.5911 Australian dollars)